I believe there was no need for repayment, if you used the loan for the purpose specified. Sounds like maybe she didn’t do that. I would guess that, in this type of business, most of her “employees” were actually independent contractors, not on a payroll, and not receiving benefits.
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>>most of her “employees” were actually independent contractors, not on a payroll, and not receiving benefits.
correct, and because they were independent contractors, they could have - and probably did - apply for their own forgivable loans.
Stupid people borrowing money and signing paperwork they didn’t read and can’t understand - what could possibly go wrong?
Sounds like the people she paid were not payroll employees but independent contractors. Those payments were not specifically carved out by the PPP loan regulations. The regs changed a bit so forgive me if I am off by a bit but I think the final ruling was that 60% had to go to employees and 40% could go to overhead expenses. But the entire loan amount was based on historic payroll, 2.5 times your average monthly payroll, and you needed to provide the payroll quarterly reports with the loan application.
But I am pretty sure they were handling so many volumes of paperwork they were likely to just go through the motions and rubber stamp just about everything - some with the rubber stamp probably didn’t understand the specific clauses either.
I would say....correct. I own a small business that has been shut down since March 2020. We use mostly independent contractors so when I looked at the PPP I knew we didn’t qualify. My daughter and I filed for unemployment instead.